Are you a newly diagnosed diabetic? Are you confused how does the pancreas function when you are diabetic? If yes? I'm going to put here the detailed mechanism of pancreatic function and insulin in diabetics in a lay men's language.
In order for your body's check-and-balance mechanism to work properly, the demand of pancreas function must subside at times.
Assume this nasty scenario:

1. Diabetics repeatedly chew down on snacks high in sugar and starch.
   
2. Pancreas has to constantly pump out insulin.
   As a result, your body has too much insulin!
3. The insulin receptors on the cells lose some of their sensitivity.
   
4. The pancreas secretes more insulin, hoping to get the receptors to respond.
   (Now you havetoo much insulin!)
5. Insulin rounds up the glucose from the bloodstream and drives it into the cells.
   (The result is hypoglycemia, or low blood sugar.
   )
6. The insulin receptors become desensitized, and insulin can't deliver enough glucose into the cells.
   ( The result is a condition known as insulin resistance.
   )
7. Eventually, more sugar remains in the bloodstream.
   The result is type 2 diabetes.
   

This list is an admittedly oversimplified picture and just one scenario that can cause ups and downs of glucose levels in people who are genetically susceptible of diabetes.
The point to remember is that when a person who's sensitive to carbohydrates eats them, the blood sugar increases more rapidly than it should.
This situation results in a rapid rise and fall in both insulin and blood sugar levels.
Bear in mind that carbs make up only part of the foods that directly affect blood sugar levels.
Fats and proteins are gradually absorbed, so the responsive insulin equipment is less likely to be triggered.
Thus normal, standard meals comprising of fats or proteins and a few carbs keep the blood sugar constant; preventing unanticipated rises and falls in glucose.